Hospitality facing £900m business rate hike, threatening ‘devastation’ in the sector

The report found that hospitality businesses will face a £3.6 billion bill next April if business rates increase in line with inflation and current relief is ended. The bill would be an increase of £900 million on top of the £2.7 billion the sector currently pays in business rates.

UKHospitality chief executive Kate Nicholls is urging the Chancellor to extend current business rates relief for the entire sector and ditch any plans to increase rates in line with inflation.

“The sector is already grappling with record inflation, rising energy costs, staffing challenges and reduced consumer appetite. An increased rates bill of this scale will prove fatal for many businesses,” she said.

“Hospitality has been hit harder than any other sector by inflation, with many already struggling to pay their bills. To increase business rates bills by a third and hang a £900m millstone around the neck of the sector would cause devastation.

“Our pubs, bars, restaurants, coffee shops and hotels, to name a few, are so often the pillars of our community and we would lose countless venues if this went ahead. For those that do survive, they would sadly have no option but to pass those unprecedented costs onto customers.

“The Government clearly understands the pressures the sector is under due to rising costs and I would urge it not to compound issues by rising bills further. What it needs to do to ensure the sector survives is extend the current relief for the entire sector and ditch any plans to increase rates in line with inflation.

“Our sector has such potential to expand, deliver economic growth and support fantastic careers, but it is simply unable to do so with more and more cost being put on it at a time of national crisis.

“If the Government wants to prove it’s on the side of business and drive investment, it won’t go ahead with a business rates hike that will devastate hospitality businesses.

“Hospitality is already disproportionately burdened by overpaying in the current system by 300 per cent, so now is the time for the government to support the sector by extending relief and delivering on its manifesto commitment to fundamentally review the unfair and outdated business rates system.”

There will be a revaluation of commercial property values in April 2023 and this will have an impact on the relative payments in each sector.